Generous housing subsidy program growing in popularity

Hungary’s CSOK housing subsidy scheme is growing in popularity, reports online daily napi.hu. Introduced at the beginning of 2016, to date some HUF 56 billion (USD 207 million) of new housing subsidies have been paid out to some 27,000 families, according to Katalin Novák, undersecretary for family, youth and international matters at the Ministry for Human Resources.

Married couples having three or more children, or promising to have three children within a specified period, can qualify for a one-time, non-refundable housing subsidy of HUF 10 million (USD 37,000), as well as a long-term, low-interest HUF 10 million loan.

The introduction of the subsidy coincided with a dramatic scale-back in value added tax in the case of new residential properties. Furthermore, new home buyers may reclaim up to HUF 5 million (USD 18,500) of VAT.

Intended to incentivize young Hungarians to marry and have large families, as well as the above-ground construction industry, 30 percent of new home buyers have taken advantage of the subsidy scheme to date, of which 83 percent have two or more children. In 82 percent of cases, families with two children are promising to have a third child. Families building new homes or adding onto existing homes also qualify for the subsidy.

Critics have questioned the sustainability of the program given its high cost to the public purse.

In addition to the generous housing subsidy, some 2700 families have availed themselves of the opportunity to reclaim up to HUF 5 million of VAT at a cost to the Hungarian treasury of HUF 11 billion (USD 41 million) to date.